State Street Corp. and Vanguard Group are reeling at the annoucement of BlackRock Global Investors, the $13.5 billion merger between BlackRock and Barclays's asset management arm.

Barclays has by far the largest ETF business, so "it could be really challenging for State Street and Vanguard to keep up," said Geoffrey Bobroff, president of Bobroff Consulting in East Greenwich, R.I. "They may be forced to change how they do business."